ACIT, CHENNAI V. Shri N.Balasubramanian, CHENNAI

ITA 1096/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64533 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-11-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 18-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI (BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ) .. I.T.A. NO. 1096/MDS/12 ASSESSMENT YEAR : 2008-09 ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE III, CHENNAI. (APPELLANT) V. SHRI N BALASUBRAMANIAN, NO.10,KARPAGAM GARDEN, IVTH CROSS STRET, ADYAR, CHENNAI 600 042. PAN : ADSPB 7706 M (RESPONDENT) APPELLANT BY : SHRI GURU BASHYAM JCIT RESPONDENT BY : NONE DATE OF HEARING : 07.11.12 DATE OF PRONOUNCEMENT : 08.11.12 O R D E R PER N.S.SAINI, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF CIT(A)-VIII, CHENNAI DATED 17.02.2012. ITA NO. 1096/MDS/12 2 2. THE DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT T HE SOLE ISSUE INVOLVED IN THE APPEAL OF REVENUE IS THAT THE CIT(A ) ERRED IN DELETING THE PENALTY OF ` 12,66,066/- LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF INVESTMENT MADE BY HIM DURING THE PREVIOUS YEAR 200 7-08. THE ASSESSEE VIDE LETTER DATED 16.10.2010 STATED THAT T HE FOLLOWING DEPOSITS WERE NOT OFFERED FOR TAX AT THE TIME OF FI LING OF RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 ON 19.01.09. DEPOSITS IN HSBC BANK ` 30,00,000/- , DEPOSITS MADE IN BANK OF BARODA C/A S B MARG BRANCH ` 6,61,832/- AND INTEREST INCOME FROM SB ACCOUNT WITH HSBC ` 1,311/- OF TOTALING TO ` 36,63,143/-. THE ASSESSEE OFFERED ADDITIONAL INCOME OF ` 36,51,248/- AFTER DEDUCTING THE BANK CHARGES OF ` 11,895/-THEREFROM, WHICH WAS ADDED TO THE INCOME OF ASSESSEE BY THE A.O WHILE MAKING THE ASSESSMENT UNDER SECTIO N 143(3) OF THE ACT. ITA NO. 1096/MDS/12 3 4. THEREAFTER THE A.O ISSUED NOTICE UNDER SECTION 271(1)(C) OF THE ACT AND IMPOSED PENALTY OF ` 12,66,006/- BEING 100% OF THE TAX SOUGHT TO BE EVADED ON CONCEALMENT OF INCOME OF ` 36,51,248/- . THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DELETE D THE PENALTY. 5. THE D.R SUPPORTED THE ORDER OF THE A.O. WHEREAS NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF SERV ICE OF NOTICE AS EVIDENCED BY THE ACKNOWLEDGEMENT CARD OF POST OFFIC E PLACED ON RECORD. 6. WE HAVE HEARD THE SUBMISSION OF D.R. AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON REC ORD. IN THE INSTANT CASE, THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, OFFERED A ADDITIONAL INCOME OF ` 36,51,248/-. THE SAID INCOME COMPRISED OF DEPOSIT OF ` 30 LAKHS IN HSBC BANK, OF ` 6,61,832/- IN BANK OF BARODA C/A SB MARG BRANCH, ` 1,311/- INTEREST ON SB ACCOUNT WITH HSBC AND BANK CHARGE OF ` 11,895/-. THE A.O ASSESSED THE ADDITIONAL INCOME AS OFFERED BY THE AS SESSEE. ITA NO. 1096/MDS/12 4 THE A.O. THEREAFTER LEVIED PENALTY UNDER SECTION 2 71(1)(C) OF RS.12,66,006/- FOR CONCEALMENT OF INCOME OF ` 36,51,248/-, WHICH WAS DELETED BY THE CIT(A) BY OBSERVING AS UNDER:- 5. I HAVE GONE THROUGH THE SUBMISSION MADE BY THE A.R OF THE APPELLANT AND CASE LAWS MENTIONED IN SUP PORT OF THE APPELLANT AS WELL AS PENALTY ORDER AND MATERIAL ON RECORD. THE APPELLANT HAS INADVERTENTLY COULD NOT VERIFY THE CREDITS IN THE TWO BANK ACCOUNTS OPENED IN THE BEGI NNING OF THE ASSESSMENT YEAR FOR THE AMOUNTS RECEIVED FROM M/S.UNITED NETWORK ENGINEERING TOWARDS REIMBURSEMEN T OF EXPENSES AS PER THE BANK STATEMENTS OF HSBC BANK OF MUMBAI MAIN OFFICE WHICH WAS OPENED BY THE APPELLAN T ON 20.04.07. IN THIS BANK ACCOUNT AN AMOUNT OF ` 30,00,000/- WAS DEPOSITED BY M/S.UNITED NETWORK ENGINEERING THR OUGH TELEGRAPHIC TRANSFER (TT) OF FUNDS FROM THE ABOVE P ARTY FOR THE SERVICES RECEIVED FROM THE APPELLANT. THE APPE LLANT WAS UNDER THE BONAFIDE IMPRESSION THAT THE ABOVE AM OUNT HAS TO BE SPENT FOR THE EXPENSES INCURRED ON ACCOUN T OF THIS SERVICE RENDERED BY HIM TO THE ABOVE PARTY AND COULD NOT CONSIDER AS INCOME. ITA NO. 1096/MDS/12 5 SIMILARLY, THE APPELLANT AS OPENED ANOTHER CURRENT ACCOUNT WITH BANK OF BARODA, SB MARG BRANCH, MUMBAI WHICH WAS OPENED ON 07.04.2007 AND BOUGHT A CHEQUE DEPOSIT OF ` 6,10,912/- AS CONSULTANCY CHARGES FROM M/S.TELEVISI ON EIGHTEEN INDIA LIMITED. WHEN THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT HAS VOLUNTARILY SURRENDE RED BOTH THE AMOUNTS IN THE ABOVE TWO BANK ACCOUNT DEPOSITS WHILE THE INCOME OF THE APPELLANT AND PAID TAXED INSTANTL Y AT ` 15,82,884/- INCLUDING INTEREST OF UNDER SECTION.234 B AT ` 3,92,746/-. IN WAY OF THE SUBMISSION MADE BY THE APPELLANT THAT THERE IS NO INTENTIONAL AND WILLFUL OMISSION TO CONCEAL ANY INCOME OR FURNISHING PARTICULARS RELATI NG TO ANY INCOME AND AVOID TAX, THE OMISSION WAS ONLY INADVER TENT. THE A.R OF THE APPELLANT HAS ALSO STATED THAT THE A PPELLANT IS A HIGH INCOME TAX PAYER WHO RETURNED INCOME OF ` 2.89 CRORE FOR THE A.Y 2009-10 AND ` 5.27 CRORE FOR THE A.Y.2010-11 AND REQUESTED FOR DELETION OF THE PENAL TY LEVIED AS THE APPELLANT HAS NOT CONCEALED ANY INCOM E AS ITA NO. 1096/MDS/12 6 THERE WAS NO DELIBERATE OMISSION AND ALSO CAME FORW ARD TO OFFER THE ABOVE AMOUNTS ON HIS OWN VOLUNTARILY WITH OUT ANY ENQUIRY OR ANY DEPARTMENTAL INVESTIGATION OFFERED T HE AMOUNT OF ` 36,51,248/- AS ADDITIONAL INCOME AND ALSO PAID THE ENTIRE AMOUNT OF TAX EVEN BEFORE COMPLETION OF THE ASSESSMENT PROCEEDINGS. THE APPELLANT ON RECEIPT OF THE ASSESSMENT ORDER UNDER SECTION 143(3) PAID THE BALA NCE TAX DUE AT ` 1,25,410/- IMMEDIATELY ON 24.01.2011. THE A.R OF THE APPELLANT HAS ALSO STATED THAT MEREL Y OFFERING ADDITIONAL INCOME WILL NOT AUTOMATICALLY A TTRACT THE PENAL ACTION AS THE APPELLANT HAS COME FORWARD IN O FFERING THE AMOUNT ON HIS OWN UNHESITATINGLY TO AVOID ANY F URTHER LITIGATION. THE A.O SHOULD HAVE EXERCISED THE DISC RETION IN FAVOUR OF THE APPELLANT AS OTHERWISE THE EXPRESSION MAY SECTION 271(1)(C) OF THE ACT REMAINS REDUNDANT. S IMILARLY WHILE LEVYING PENALTY ON THE ADDITION MADE ON THE B ASIS OF MERE OR LESS ON THE OFFER MADE BY THE APPELLANT THE ASSESSING OFFICER HAS NOT BROUGHT ENOUGH INCRIMINAT ING ITA NO. 1096/MDS/12 7 MATERIAL FOR CONCEALMENT AND THERE IS NO MATERIAL F OR ESTABLISHING THE CONCEALMENT INDEPENDENTLY. THEREF ORE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE APPELLANT S CASE, THE PENALTY IS NOT LEVIABLE AS HELD IN THE CASE OF HINDUSTAN STEEL LIMITED V. STATE OF ORISSA (83 ITR 26)(SC). SIMILAR VIEW WAS HELD IN A RECENT JUDGEMENT IN THE CASE OF P.V.RAMANAREDDY V. ITO ITA NOS. 1852-1857/HYD./2011 ORDER DATED 06.01.2011. KEEPING IN VIEW OF THE COM PLIANCE ON THE PART OF THE APPELLANT AND ALSO DISCHARGE OF TAX LIABILITY THE ASSESSING OFFICER IS NOT JUSTIFIED IN LEVYING PENALTY ON THE ADMITTED INCOME DURING THE COURSE OF ASSESSMENT PROCEEDINGS VOLUNTARILY WITHOUT ANY DEPARTMENTAL PROBE APART FROM THE CASE HAS BEEN SEL ECTED FOR SCRUTINY ON CASS SELECTION BASIS. THEREFORE, T HE PENALTY LEVIED BY THE ASSESSING OFFICER IS NOT WARR ANTED AS THERE IS NO CONCEALMENT ESTABLISHED BY THE ASSESSIN G OFFICER NOR THE APPELLANT HAS FURNISHED ANY INACCUR ATE PARTICULARS INTENTIONALLY AND HENCE THE PENALTY LEV IED AT ` 12,66,006/- IS DELETED. ITA NO. 1096/MDS/12 8 WE FIND THAT THE A.O HAS ASSESSED THE INCOME RELEVA NT TO THE PENALTY UNDER DISPUTE BY OBSERVING AS FOLLOWS:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AS SESSEE WAS ASKED TO FURNISH THE DETAILS REGARDING THE INVE STMENTS MADE BY HIM DURING THE PREVIOUS YEAR 2007-08. THE ASSESSEE VIDE HIS LETTER DATED 16.10.2020, STATED T HAT THE FOLLOWING DEPOSITS WERE NOT OFFERED FOR TAX AT THE TIME OF FILING OF RETURN OF INCOME. ` DEPOSITS IN HSBC BANK 30,00,000 DEPOSITS MADE IN BANK OF BARODA C/A SB MARG BR. 6,61,832 INTEREST ON SB A/C WITH HSBC 1,311 36,63,143 LESS BANK CHARGES (-) 11, 895 TOTAL 36,51,248 HE OFFERED AN ADDITIONAL INCOME OF ` 36,51,248/- FOR TAXATION FOR THE ASST. YEAR 2008-09 AND ALSO PAID TAX OF RS. 15,82,884/- ON 18.12.2010 AND PRODUCED THE CHALLAN FOR PAYMENT. ITA NO. 1096/MDS/12 9 7. A PERUSAL OF THE RECORDS AVAILABLE BEFORE US SH OW THAT THE RELEVANT INCOME OF ` 36,51,248/- WAS DISCLOSED BY THE ASSESSEE BY HIMSELF TO THE DEPARTMENT DURING THE COURSE OF ASSE SSMENT HEARING. NO MATERIAL COULD BE BROUGHT ON RECORD BEFORE US TO SHOW THT THE DISCLOSURE OF INCOME MADE BY THE ASSESSEE WAS NOT V OLUNTARY, BUT DUE TO ANY KIND OF THREAT OF DETECTION. ON THE ABO VE FACTS, THE DECISION OF THE CIT(A) FINDS THE SUPPORT FROM THE D ECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. S. SANKARAN IN 241 ITR 825 (MAD.) WHEREIN IT HAS BEEN HELD THAT IN ABSENCE OF MATERIAL AVAILABLE WITH THE DEPARTMENT TO SHOW THAT INCOME HAD BEEN CONCEALED BY THE ASSESSEE, MERE ADDITION TO THE INC OME AT THE INSTANCE OF THE ASSESSEE WOULD NOT WARRANT A FIND ING OF CONCEALMENT OR LEVY OF PENALTY. 8. ON THE SAME ANALOGY, WHEN ADDITIONAL INCOME IS DECLARED VOLUNTARILY BY THE ASSESSEE DURING THE COURSE OF AS SESSMENT PROCEEDINGS, IT CANNOT LEAD TO CONCLUSION THAT THE ASSESSEE DELIBERATELY CONCEALED THE SAID INCOME IN THE RETUR N OF INCOME FILED ITA NO. 1096/MDS/12 10 BY HIM. KEEPING IN VIEW OF THE ABOVE FACTS AND CIR CUMSTANCES OF THE CASE, WE DO NOT FIND ANY GOOD AND JUSTIFIABLE REAS ON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX(A). IT IS CONFIRMED. THE GROUND OF APPEAL OF REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THURSDAY , THE 08 TH NOVEMBER, 2012 AT CHENNAI. SD/- SD/- (S.S.GODARA) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 08 TH NOVEMBER, 2012. K S SUNDARAM. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE